If you earn £115,000 per year, you are in an excellent position to secure a mortgage. However, lenders assess various factors beyond your salary, including your deposit, credit history, and overall financial stability.
In this guide, we’ll explore how much you can potentially borrow, what affects your mortgage affordability, and how to improve your borrowing power.
How Much Can You Borrow on a £115,000 Salary?
Most UK lenders calculate borrowing limits based on an income multiple of 3.5 to 5 times your annual salary.
- 3.5x salary: £402,500
- 4x salary: £460,000
- 4.5x salary: £517,500
- 5x salary: £575,000 (available with some lenders)
These figures are general estimates, and the final amount depends on lender criteria, creditworthiness, and financial commitments.
Factors That Affect Mortgage Affordability
Lenders analyze various aspects of your finances before deciding how much they will lend. Below are key factors influencing mortgage eligibility:
1. Debt-to-Income Ratio
Lenders assess any existing debts, such as loans, credit cards, and car finance. Lowering outstanding debt before applying can improve your borrowing capacity.
2. Credit Score and Financial History
Your credit score plays a major role in determining the mortgage amount and interest rates you qualify for. A higher credit score can unlock better deals, while a poor score may limit your options.
3. Living Expenses and Monthly Outgoings
Lenders evaluate your monthly expenses, such as rent, utility bills, and other financial commitments, to determine affordability.
4. Deposit Size and Loan-to-Value (LTV) Ratio
A larger deposit lowers your Loan-to-Value (LTV) ratio, making you a more attractive borrower and increasing the chances of securing lower interest rates.
5. Employment Stability and Income Consistency
Lenders favor applicants with consistent employment and verifiable income. If self-employed, you may need to provide two years of tax returns to prove stable earnings.
Example Scenario: Buying a Home on a £115,000 Salary
If you earn £115,000 per year, have a 10% deposit, and minimal debts, your mortgage affordability could look like this:
- Loan amount (4.5x salary): £517,500
- Deposit (10% of property price): £57,500
- Potential home price: £575,000
Lenders may adjust your mortgage offer based on affordability checks and your financial commitments.
How Your Deposit Impacts Mortgage Affordability
Your deposit size directly affects your mortgage terms and interest rates:
- 5% Deposit (£28,750) – Limited lender options, higher monthly repayments.
- 10% Deposit (£57,500) – Access to better mortgage deals and lower interest rates.
- 20%+ Deposit (£115,000+) – Best mortgage options with the lowest borrowing costs.
A higher deposit lowers your Loan-to-Value (LTV) ratio, improving affordability and reducing lender risk.
Government Schemes for Homebuyers
If saving for a deposit is challenging, you may qualify for government-backed schemes:
- Help to Buy Equity Loan – Provides a 20% loan (40% in London) for new-build homes with a 5% deposit.
- Shared Ownership – Allows you to buy a portion of a home and rent the remaining share, with an option to increase ownership.
- First Homes Scheme – Offers 30-50% discounts on selected properties for first-time buyers and key workers.
These schemes can make homeownership more accessible by reducing upfront costs.
Ways to Increase Your Mortgage Borrowing Power
To qualify for a higher mortgage amount or secure better terms, consider these strategies:
- Reduce Debt – Paying off loans and credit balances improves your affordability.
- Boost Your Credit Score – Ensure timely bill payments, check your credit report for errors, and limit new credit applications.
- Save for a Larger Deposit – A bigger deposit reduces monthly repayments and improves mortgage options.
- Consider a Joint Mortgage – Applying with a partner or family member can increase borrowing capacity.
- Consult a Mortgage Broker – Brokers can help find lenders offering higher income multiples and flexible lending terms.
Additional Home-Buying Costs to Budget For
Aside from your mortgage, you should budget for these additional costs:
- Stamp Duty – First-time buyers in England and Northern Ireland are exempt from Stamp Duty on properties up to £425,000.
- Legal and Conveyancing Fees – Covers property searches, contracts, and ownership transfer.
- Mortgage Arrangement Fees – Some lenders charge setup fees.
- Survey and Valuation Costs – Ensures the home is priced correctly and in good condition.
- Insurance and Moving Costs – Includes home insurance, removals, and furnishings.
Being aware of these costs ensures a smooth home-buying experience.
Choosing the Right Mortgage Type
The type of mortgage you select should align with your financial goals and risk tolerance. Common options include:
- Fixed-Rate Mortgage – Locks in an interest rate for a fixed period, ensuring stable repayments.
- Tracker Mortgage – Interest rate follows the Bank of England base rate, meaning payments can fluctuate.
- Interest-Only Mortgage – Lower initial payments but requires a plan to repay the loan principal.
- Variable-Rate Mortgage – Monthly payments change based on lender interest rate adjustments.
Selecting the right mortgage depends on your long-term financial plans.
Final Thoughts: Can You Buy a Home on a £115,000 Salary?
A £115,000 salary provides excellent mortgage affordability, but the exact amount you can borrow depends on deposit size, financial commitments, and lender policies.
With strong financial planning, a stable income, and a sufficient deposit, you could qualify for a mortgage in the range of £402,500 – £575,000.
For personalized mortgage advice and access to the best mortgage rates, working with a mortgage broker can help you navigate the process and secure the most competitive terms.
